OCHCA Pays $7 million to settle false billings claims

H/T to Peggy Lowe at Total Buzz.  I will be writing more on this later.

Issued onThursday, December 20 at 2:05 p.m. PST


The County of Orange today paid the federal government $7 million to resolve allegations that its Health Care Agency, Behavioral Health Services Division (OCHCA) submitted false claims to the Medicare Program between 1990 and 1999. Without admitting wrongdoing, the County of Orange paid the settlement to resolve a federal False Claims Act investigation into OCHCA’s billing practices.       

OCHCA is a participating Medicare Program provider subject to the rules and regulations governing Medicare reimbursement. Under the Medicare program, psychiatric or evaluative interviews are reimbursable only if performed by physicians, or by clinical psychologists and licensed social workers who are under the direct personal supervision of a physician. The government’s investigation found that during the 1990s OCHCA billed Medicare for psychiatric evaluations performed by OCHCA personnel that did not meet these requirements. The investigation also concluded that OCHCA had repeatedly billed Medicare for activities that did not qualify as covered mental health services.       

The investigation further revealed that during the same 10-year period OCHCA improperly billed and was paid for dispensing self-administered methadone to drug-addicted patients, which is a non-covered service. Finally, the investigation showed that, in a practice known as upcoding, OCHCA had charged brief office visits to monitor or change a drug prescription as more expansive or intensive office visits, resulting in greater compensation.

As part of the settlement, OCHCA has entered into an integrity agreement with the Department of Health and Human Services, Office of Inspector General.  The integrity agreement is designed to ensure continuing compliance by OCHCA with Medicare and other federal health programs’ rules and regulations. OCHCA has also voluntarily implemented an ethics-based Compliance Program.

The settlement was negotiated by the United States Attorney’s Office for the Central District of California, which received investigative assistance from the Office of Inspector General for the Department of Health and Human Services and the Federal Bureau of Investigation. The Office of Counsel to the HHS Inspector General also participated in the negotiations.

       Release No. 07-169

Here is the Press Statement from the Health Care Agency and here is the Settlement Agreement.